Information technology company VNET Group (VNET) is up over 315% in the past year. One trader is betting on a further surge higher in shares.
That’s based on the March $9.00 calls. With 50 days until expiration, 12,436 contracts traded compared to a prior open interest of 108, for a 115-fold surge in volume on the trade. The buyer of the calls paid $0.27 to make the bullish bet.
VNET shares recently traded for just over $7, so the stock would need to rally by $2, or about 29%, for the option to move in-the-money. Shares are currently right near their 52-week high of $7.18.
Currently, VNET is losing money, although it did manage to grow its revenues by 9% in the past year. With China now showing its hand in the AI race, VNET’s hosting and data center services may allow it to keep increasing its revenues and moving towards profitability.
Action to take: Momentum investors may like VNET shares here, as the stock is in a strong uptrend that can likely trend higher in the weeks ahead. Value-oriented investors may want to look elsewhere, given the unsteady earnings and lack of a dividend.
For traders, the March $9 calls are well positioned to profit from a continued rally in shares in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.